The National Police are interested in how Nepop and Komarnytskyi built housing for Kyiv Metro workers

The National Police are interested in how Nepop and Komarnytskyi built housing for Kyiv Metro workers

Since April 2021, the National Police has been investigating a possible embezzlement of budget funds during the construction of a 25-story residential building for employees of the municipal enterprise Kyiv Metro (KP “Kyivskyi metropoliten”) and PJSC Kyivmetrobud on Holosiivskyi Avenue, 74.

Since 2016, Skybud Group LLC has been performing these works on behalf of KP “Spetszhytlofond” – a company that is likely connected to businessman Denys Komarnytskyi (photo at left). According to the investigation, the defendants in the case may have fabricated additional works that allegedly required spending more than 19 million hryvnias. Apparently, Deputy Head of the Kyiv City State Administration (KCSA) Viacheslav Nepop (photo center), who by his duties is responsible for this construction, faces “difficult days”: recently law enforcement has increasingly focused on the questionable activities of the municipal enterprises under his supervision.

As KV has learned, investigators are currently probing possible abuses during the construction of the residential building for employees of KP “Kyivskyi metropoliten” and PJSC “Kyivmetrobud.”

The Main Directorate of the National Police of Kyiv opened criminal proceeding No. 42021102010000015 concerning a possible offense under Part 2 of Article 191 of the Criminal Code of Ukraine (misappropriation, embezzlement, or seizure of another’s property by an official abusing their position1). On 10 June 2021, the Holosiivskyi District Court authorized investigators to access documents held by KP “Spetszhytlofond” (the project owner) and Skybud Group LLC (the contractor) (*). This concerns design, estimate, execution and reporting documentation, goods and goods-transport invoices, acceptance certificates for completed works, and so on.

Note that the case materials do not specify the name of the municipal enterprise or its contractor. However, the court rulings clarify the cost of the works, the procurement code in the Prozorro system, and other details that make it easy to identify the parties involved in this proceeding.

KV decided to analyze how the construction unfolded and how budget funds could have been stolen.

Controversial construction

On 15 March 2012, the Kyiv City Council, by decision No. 327/7664, transferred a plot of 0,54 hectares on the 40 Anniversary of October Avenue (now Holosiivskyi Avenue), 74, to KP “Spetszhytlofond” for permanent use. The land was intended for the construction, operation, and maintenance of a residential building for employees of KP “Kyivskyi metropoliten” and PJSC “Kyivmetrobud” (the regular contractor of the capital’s subway – KV) with social infrastructure facilities and a primary service block.

On 15 February 2013, the Main Department of Urban Planning and Architecture of the Kyiv City State Administration approved, by order No. 1827/0/12/009-13, the urban planning conditions and restrictions (UPCs) for KP “Spetszhytlofond” to design the specified project on the 40-Anniversary of October Avenue, 74. According to the document, the plot could be designed for one 25-story building with a total area of 16,4 thousand sq. m. The building was to contain 230 apartments, and there were to be 62 parking spaces nearby.

On 20 November 2014, Kyiv City State Administration Head Vitali Klitschko, by his order No. 1362, approved the project for the building. According to the document, some of the technical baseline indicators were slightly changed – for example, the building area increased to 16,87 thousand sq. m.

According to the Our Money portal, on 22 April 2015 a contract was signed between KP “Spetszhytlofond” and Investment and Construction Company (IBC) “Integral Group” LLC (**) to build the residential building for employees of KP “Kyivskyi metropoliten” and PJSC “Kyivmetrobud” with social facilities and a primary service block on the 40-Anniversary of October Avenue, 74. The cost of the works was to be 133,09 million hryvnias. The contractor was obliged to build a 25-story building with 230 apartments (138 one-room and 92 two-room), arrange a parking lot for 42 vehicles (instead of the planned 62 spaces – KV), a bicycle area for 10 spots, etc. That subcontracting agreement was signed before the Prozorro system was introduced, so open sources lack information about the deadline for these works.

On 3 August 2015, the State Architectural and Construction Inspectorate (DASIR) registered for KP “Spetszhytlofond” declaration No. KB 030152150679 about the start of construction at the noted address. Strangely, the contractor in that document was listed as PrJSC Hyprotsivilprombud. Meanwhile, on the project passport soon installed at the construction site, the contractor was shown as the above IBC “Integral Group” LLC, and PrJSC Hyprotsivilprombud was listed as the general designer.

At the end of August 2015, residents of the surrounding buildings protested the construction on the 40-Anniversary of October Avenue, 74. They feared the works would damage their homes and could endanger the metro tunnel (the Holosiivska station is nearby). In November that year, Kyiv resident Lyudmyla Hlushchenko filed a petition on the Kyiv City Council website asking to ban construction that contradicts urban planning legislation. However, the petition gathered just over five hundred signatures (instead of the required 10 thousand), so the city authorities legally had the option to do nothing. As often happens in the capital, public protests led to no result.

According to Our Money, in March 2016 the subcontract with KP “Spetszhytlofond” and IBC “Integral Group” LLC was terminated. The cause could not be found in open sources. Two months later, on 30 May 2016, KP “Spetszhytlofond” signed a contract for the same building with a new contractor – Skybud Group LLC. The works were valued at 134,4 million hryvnias, and for that sum the contractor was to build the same 25-story building with 230 apartments. The deadline was March 2017 (likely extended multiple times thereafter – KV).

On 3 October 2016, DASIR registered a new permit No. IU 115162772447 for KP “Spetszhytlofond” to carry out construction at the given address. The contractor was listed as Skybud Group LLC.

On 29 November 2019, KP “Spetszhytlofond” announced a Prozorro tender for additional construction works on the project. These were works included in the original project but became necessary “due to unforeseen circumstances.” The announcement immediately stated that the contract would be awarded to the previous performer of these works, and such works were technically or economically connected to the main contract. The cost was to be 19,24 million hryvnias. The same amount was published in a letter from Skybud Group LLC the company sent to KP “Spetszhytlofond” a week earlier – on 22 November 2019.

On 16 December 2019, KP “Spetszhytlofond” and Skybud Group LLC signed a contract for the additional works. The cost remained 19,24 million hryvnias. Initially the contractor was to complete these works by December 2020, but the deadlines were repeatedly extended, and ultimately Skybud Group LLC committed to finish by June 2021 inclusive. How much the contractor has already been paid under this agreement is unknown.

The tender announcement stated that funding for these works was to come from the enterprise’s “own funds.” In other words, not money allocated by the Kyiv City Council from the municipal budget, but funds KP “Spetszhytlofond” earned through its activities. One can assume the initial contract was financed similarly. However, the phrase “enterprise’s own funds” is conditional: municipal enterprises cannot freely dispose of “their” money since they are accountable to the city community – that is, each city resident.

As noted above, in April 2021 the construction on Holosiivskyi Avenue, 74, drew the attention of law enforcement. Investigators focused on the mentioned “additional construction works.”

Law enforcement were concerned that the Prozorro announcement did not provide “any proper justification for the necessity of the specified additional works and a calculation of that exact cost,” aside from a reference to the Law of Ukraine “On Public Procurement.” The aforementioned letter from Skybud Group LLC dated 22 November 2019 was also not published. According to the case materials, the police uncovered a scheme involving fictitious companies organized by Skybud Group LLC. All these facts, the investigators believe, may indicate misappropriation of budget funds.

In May 2021, the National Police sent letters to KP “Spetszhytlofond” and Skybud Group LLC requesting information about the “unforeseen circumstances” that led to the need to sign another subcontract. KP’s management replied that such documents could be provided only on the basis of an appropriate court ruling, and the contractor gave no response to law enforcement (as of 10 June 2021). Consequently, investigators decided to seize documents from the case’s defendants.

According to the LUN portal, on Holosiivskyi Avenue, 74, the Silver House residential complex is located and is still under construction. Today, all apartments in it have already been sold. How many apartments were allocated to employees of KP “Kyivskyi metropoliten” and PJSC “Kyivmetrobud” and on what terms is not directly stated in open sources. It is known that, for example, in 2015 it was expected that these categories of people would receive about 30% of the apartments, while the rest could be purchased by people not related to the capital’s subway. On the Budynochok real estate forum, anonymous commenters noted that employees of the mentioned KP and PJSC were forbidden to disclose the terms of their deals, and housing was not provided to them free of charge – possibly at preferential prices and on instalment plans.

About the scheme participants

According to the YouControl analytical system, Skybud Group LLC was registered in June 2015. Its founder is currently Kyiv resident Oleksandr Stepanenko, and its director is Ihor Softenko. The latter has held the position only since early July 2021. Previously, from September 2019, the company was officially headed by Mykhailo Muzychenko.

As KV reported, MP Heorhii Leros (now nonaffiliated, formerly with the Servant of the People faction) linked this company to the controversial businessman and former Kyiv City Council deputy of the VI convocation from Leonid Chernovetskyi’s Bloc, Denys Komarnytskyi. Komarnytskyi has repeatedly been named among those who “represent” the interests in the capital of Andriy Yermak, Head of the President’s Office. In particular, Komarnytskyi has been associated with construction interests, the appropriation of budget funds on various infrastructure projects (including the Podilsko-Voskresenskyi bridge-crossing), and sand extraction within Kyiv.

Since 10 March 2016, KP “Spetszhytlofond” has been headed by Volodymyr Shariy (photo right), who before his appointment worked for a year as the enterprise’s deputy head. Shariy was a deputy in the previous VIII convocation of the Kyiv City Council – elected from Solidarity and a member of the city council’s commission on urban planning, architecture, and land use. In the local elections held in the fall of 2020, he ran for a seat in the Kyiv City Council from the mayor Vitali Klitschko’s party UDAR, but he did not receive a mandate.

The enterprise is subordinate to the Department of Construction and Housing Provision of the KCSA, which since 2 July 2021 has been headed by Borys Rabotnyk. From 22 March 2016 to 25 October 2019 this department was led by Kostiantyn Fedotov; from 25 October 2019 to 1 July 2020 – by Volodymyr Denysenko; and from 1 July 2020 to 14 December 2020 – by Serhii Martynchuk.

Since 2018, the activities of this department and thus all enterprises subordinate to it have been overseen by Deputy Head of the KCSA Viacheslav Nepop. From 2002 to 2018 he headed KP “Zhitloinvestbud-UKB” – an enterprise that has also repeatedly featured in “criminal chronicles.” For example, the prosecutor’s office is still investigating a possible embezzlement of budget funds during reconstruction works at the Kyiv Zoo facilities on Peremohy Avenue, 32.

Open-source data indicate that Volodymyr Shariy and Viacheslav Nepop are well acquainted with the aforementioned Denys Komarnytskyi. Blogger and political observer Yevhen Khursin wrote in October 2020 that the businessman’s front companies and so-called “patron” monopolized contracts from KP “Spetszhytlofond,” and the enterprise itself is called Komarnytskyi’s “pocket firm.”

In May 2020, a scandalous audio recording of a phone conversation between Denys Komarnytskyi and Viacheslav Nepop surfaced online, during which the former insulted and humiliated the latter in various ways. Bihus Info journalists suggested that Komarnytskyi permits himself such behavior because a number of municipal enterprises under Nepop’s responsibility for years awarded billion-hryvnia contracts to shell companies within Komarnytskyi’s orbit.

* Skybud Group LLC (EDRPOU code: 39861149);

** Construction and Investment Company “Integral Group” LLC (EDRPOU code: 37560169).

Photo: KV collage

KyivVlada

Oleksandr Hlazunov